B-139971, JUL. 17, 1959

B-139971: Jul 17, 1959

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TO THE SECRETARY OF AGRICULTURE: REFERENCE IS MADE TO A LETTER DATED JUNE 19. ALLEGES IT MADE IN ITS BID ON WHICH A CONTRACT WAS AWARDED TO THAT COMPANY ON MAY 12. THE OTHER TWO BIDS RECEIVED WERE $2. AWARD WAS MADE TO MITTS AND MERRILL. IT IS STATED THAT IMMEDIATELY ON RECEIVING THE NOTICE OF AWARD. THE WORKSHEET SHOWS THAT ITS BID WAS INTENDED AS $3. WAS LISTED ON THE COMPANY'S PRICE LIST AS $3. THIS PRICE WAS USED ON THE COMPANY'S WORKSHEET IN ARRIVING AT THE BID OF $3. THE CONTRACTING OFFICER STATED THAT THE DIFFERENCE BETWEEN THE BIDS RECEIVED WAS NOT CONSIDERED SUFFICIENT TO PLACE THE CONTRACTING OFFICER ON NOTICE THAT AN ERROR HAD BEEN MADE. IT WOULD APPEAR THAT A REQUEST FOR VERIFICATION OF THE BID WOULD HAVE BEEN IN ORDER BEFORE ITS ACCEPTANCE.

B-139971, JUL. 17, 1959

TO THE SECRETARY OF AGRICULTURE:

REFERENCE IS MADE TO A LETTER DATED JUNE 19, 1959, AND ENCLOSURES, FROM THE ADMINISTRATIVE ASSISTANT SECRETARY OF AGRICULTURE REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR MITTS AND MERRILL, INC., ALLEGES IT MADE IN ITS BID ON WHICH A CONTRACT WAS AWARDED TO THAT COMPANY ON MAY 12, 1959.

BY INVITATION NO. R2-59-48, ISSUED APRIL 9, 1959, THE UNITED STATES DEPARTMENT OF AGRICULTURE, FOREST SERVICE, LINCOLN, NEBRASKA, REQUESTED BIDS FOR ONE PORTABLE TRAILER MOUNTED CHIPPER. IN RESPONSE, MITTS AND MERRILL, INC., SUBMITTED A BID OF $2.732, WITH PROMPT PAYMENT DISCOUNT OF 19 PERCENT FOR PAYMENT WITHIN 30 CALENDAR DAYS, OR A NET PRICE OF $2,212.92. THE OTHER TWO BIDS RECEIVED WERE $2,650 AND $2.926, NET. AWARD WAS MADE TO MITTS AND MERRILL, INC., MAY 12, 1959. IT IS STATED THAT IMMEDIATELY ON RECEIVING THE NOTICE OF AWARD, THE CONTRACTOR ADVISED THE CONTRACTING OFFICER THAT IT HAD MADE AN ERROR IN ITS BID IN THAT IT HAD INTENDED TO BID $3,373, LESS DISCOUNT OF 19 PERCENT FOR PAYMENT WITHIN 30 DAYS, OR A NET OF $2,732.13. BY LETTER OF MAY 22, 1959, THE COMPANY FURNISHED ITS ORIGINAL WORKSHEET, ITS COPY OF THE INVITATION AND ITS PRICE LIST DATED JANUARY 20, 1959. THE WORKSHEET SHOWS THAT ITS BID WAS INTENDED AS $3,373, LESS DISCOUNT OF 19 PERCENT FOR PAYMENT WITHIN 30 DAYS. THE BASIC PART OF THE CHIPPER, THE ENGINE, WAS LISTED ON THE COMPANY'S PRICE LIST AS $3,125. THIS PRICE WAS USED ON THE COMPANY'S WORKSHEET IN ARRIVING AT THE BID OF $3,373.

THE CONTRACTING OFFICER STATED THAT THE DIFFERENCE BETWEEN THE BIDS RECEIVED WAS NOT CONSIDERED SUFFICIENT TO PLACE THE CONTRACTING OFFICER ON NOTICE THAT AN ERROR HAD BEEN MADE, OR THAT THE LOWEST BID RESULTED BY REASON OF A MISTAKE MADE ON THE PART OF THE BIDDER.

IN THE SPACE PROVIDED IN THE BID FORM FOR SHOWING THE RATES OF PROMPT PAYMENT DISCOUNT, THE COMPANY OFFERED A DISCOUNT OF 19 PERCENT FOR PAYMENT WITHIN 30 DAYS. A PROMPT PAYMENT DISCOUNT OF 19 PERCENT WOULD APPEAR TO BE OUT OF ALL PROPORTION TO THE PERCENTAGE OF DISCOUNT GENERALLY ALLOWED ON A TIME OR PROMPT-PAYMENT BASIS. IN THE CIRCUMSTANCES, IT WOULD APPEAR THAT A REQUEST FOR VERIFICATION OF THE BID WOULD HAVE BEEN IN ORDER BEFORE ITS ACCEPTANCE. IT APPEARS PROBABLE THAT IF THE BID HAD BEEN QUESTIONED, THE COMPANY WOULD HAVE DETECTED ITS ERROR IN SHOWING THE CONTRACT PRICE AS $2,732.

ACCORDINGLY, THE CONTRACT SHOULD BE CANCELED WITHOUT LIABILITY TO THE COMPANY.